Sistema to stay out of 2G bid,pins hopes on SC ruling

* In a surprise move,Reliance Industries also did not bid for any circle

Written by ENS Economic Bureau | New Delhi | Published: October 20, 2012 12:55:57 am

Russian telecom company Sistema decided not to bid in next month’s auction of airwaves,pinning its hope instead on a Supreme Court case to get back its licence. On the last day for putting in the bids for the auction,while Sistema Shyam Teleservices Ltd (SSTL) did not bid for any circle,the other big surprise was Reliance Industries,which too did not make any appearance.

Instead,according to informed sources,Videocon has submitted applications for all circles. Norwegian firm Telenor,however,put in applications along with Vodafone which has apparently bid for 17 circles. Bharti Airtel is learnt to have submitted application to bid for five circles along with Idea for seven and Tata Teleservices (TTSL) for only three circles.

The auctions became necessary after the Supreme Court,in February,quashed all 122 licences awarded in 2008 by former telecom minister A Raja.

The pattern of applications shows that the companies will invest carefully this time to fill up gaps in their pan-India coverage. The spectrum,government will hand out for each circle,will allow on an average two companies to enter them.

Videocon Industries,which had won pan-India spectrum in 2008 too confirmed it has submitted applications to bid for both GSM and CDMA technologies.

The auction is expected to fetch the government about Rs 40,000 crore this fiscal. It is also slated to earn about Rs 35,000 crore,mostly from GSM operators as surcharge for holding excess spectrum beyond 4.4 Mhz and 2.5 Mhz for CDMA operators.

For the November auctions the government has finalised a higher base price for CDMA airwaves at Rs 18,200 crore for a 5 Mhz spectrum and Rs 14,000 crore for a 5 Mhz GSM spectrum. The auctions of GSM airwaves will begin on November 12 and for CDMA airwaves — two days after the first one gets over.

Explaining the rationale for keeping away from the auctions,a Sistema release said that it has been unfairly penalised in the Supreme Court ruling and has filed a curative petition seeking to restore its licences. “(The company) believes it has a strong case and is determined to await its hearing… “

The decision puts at stake its 16 million subscribers as they may not be able to use their phones after January.

BUSINESS BY BIDS

* Videocon has submitted bids for all circles

* Vodafone and Telenor have bid for 17 circles

* Bharti Airtel bids for 5 circles and Idea Cellular for 7 circles

* The auctions are expected to net the exchequer R40,000 crore

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